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The public and private provision of pure public goods and the distortionary effects of income taxation: a political economy approach


  • Jun-ichi Itaya
  • A.G. Schweinberger


A pure public good is provided by the government and the voluntary contributions of two types of households. The government finances its contribution by means of income taxation. The latter has distortionary effects. A third type of household never makes contributions. We analyse the effects of changes in the income tax rate on (a) the provision of the public good, (b) the private contributions of the households, and (c) changes in the distribution of income and welfare between contributing and non-contributing households. We derive a simple and testable condition under which the lowering of the income tax entails a Pareto improvement.

Suggested Citation

  • Jun-ichi Itaya & A.G. Schweinberger, 2006. "The public and private provision of pure public goods and the distortionary effects of income taxation: a political economy approach," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 1023-1040, August.
  • Handle: RePEc:cje:issued:v:39:y:2006:i:3:p:1023-1040

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    References listed on IDEAS

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    Cited by:

    1. Hongyun Han & Zhijian Zhang & Sheng Xia, 2016. "The Crowding-Out Effects of Garbage Fees and Voluntary Source Separation Programs on Waste Reduction: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 8(7), pages 1-17, July.
    2. Arbel, Yuval & Bar-El, Ronen & Schwarz, Mordechai E. & Tobol, Yossi, 2014. "Voluntary Contributions to the Establishment and Operation of Public Goods: Theory and Experimental Evidence," IZA Discussion Papers 8532, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods


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